How is Property Acquired by Inheritance Handled in an Illinois Divorce?
When someone passes away, they often leave an inheritance to their loved ones through their estate plan. Heirs may receive money, real estate, vehicles, jewelry, or other assets from a close friend or relative who has passed away. How is this type of property handled during divorce? Do both spouses have a right to funds or property obtained through an inheritance? What if the inheritance was acquired before the couple decided to divorce? Is there a way to protect an inheritance from being split between spouses in a divorce?
Are Assets Obtained Through Inheritance Marital or Non-Marital Property?
Divorcing spouses have the right to negotiate their own property division arrangement during a divorce. If they cannot reach an agreement about who should keep what property, the Court will be forced to intervene. Illinois Courts follow equitable distribution laws when dividing property. Property acquired by either spouse during the marriage is typically considered marital property. However, Illinois law explicitly states that property acquired by inheritance is non-marital property owned solely by the spouse who inherited it. This may seem straightforward, but determining ownership rights of property originally acquired by inheritance can be complicated in certain situations.
What Happens if Inheritance Assets Are Commingled with Marital Property?
Determining a divorcing spouse’s entitlement to inheritance assets is harder to determine when the assets are mixed with marital property.
Consider the following example: A man receives $50,000 in inheritance money from his grandfather. He deposits this money into a joint account he shares with his wife. If the couple divorces, does the husband have the exclusive right to the $50,000?
In the example above, the inheritance funds were mixed with marital property shared by both spouses. This means that the Court would likely consider the $50,000 to be marital property that is jointly held by both spouses. This is why many financial professionals and family law attorneys encourage individuals to keep inheritance funds in a separate account. Alternatively, a prenuptial agreement or postnuptial agreement may be used to designate certain property as non-marital. If the husband had kept the inheritance funds separate, the funds would likely be considered non-marital property and he would not be obligated to share the funds with his wife during divorce.
Contact a Palatine Divorce Lawyer
Commingled assets are just one issue that can complicate property division during your divorce. Contact knowledgeable Arlington Heights divorce attorney Nicholas W. Richardson to get the help you need. Call 847.873.6741 for a free, confidential conference today.